[kenrosencpa]

Hello,
I have a preorder for an R1T, adventure with Quad and Max pack, Manual Tonneau and Wall Charger. Currently the MSRP is $82,800. I need to make some changes due to Rivian eliminating the Max pack with the Quad. While I am at this, I want to keep the MSRP down to $80,000 to qualify me for the EV tax credit. I don't feel totally comfortable that the contract we signed this year is going to satisfy the IRS's binding contract exception.

If I delete the Quad motor and go with the enhanced dual my price is $80,800, its still above 80k. Deleting the Wall charger only saves $500 so I would need to delete the $800 Tonneau Cover.

I still want the cover and possibly I can buy it later. Does anyone know if the cover can be purchased aftermarket. Do they look difficult to install?

Alternatively, I could downgrade to the standard dual motors and not have any issues with pricing. However, it would be nice to get another 100hp, not that I need it.

thanks

 

[Yossarian]

You need to check with a tax expert, but I'm reasonably sure that accessories don't count against the cap. If the basic car plus the Max battery are under $80k - and the other criteria that I believe vary by time (e. g., US content) - are also met, you qualify for the credit. Not sure if performance upgrades count.

 

[kenrosencpa]

Yossarian,
I am a tax expert. I am a CPA and manage a tax practice in California and Florida. Having said that I do not believe that the IRS will honor our binding contract with Rivian. the following is from the IRS.

In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.

The contract we signed says "As part of the consideration you provided to Rivian for this Order, one hundred dollars of the deposit amount you submitted with your preorder/reservation becomes non-refundable. "

Well for an 85,000 vehicle 5% is $4,250 not $100. Good luck with the credit if your return is examined. I am going to assume the IRS will not consider our contract with Rivian binding.

more on the accessories issue next post.

 

[kenrosencpa]

Yossarian, the IRS has defined MSRP as "MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay. " Credits for New Clean Vehicles Purchased in 2023 or After | Internal Revenue Service (irs.gov)

I assume these cars will meet the final assembly in the US. All that is needed is meeting the income test.

 

[John B R1T]

Yossarian, the IRS has defined MSRP as "MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay. " Credits for New Clean Vehicles Purchased in 2023 or After | Internal Revenue Service (irs.gov)

I assume these cars will meet the final assembly in the US. All that is needed is meeting the income test.

I don't think the wall connection to the charger is considered to be "accessory to the vehicle". In fact, it is (at least when hardwired) considered to be an improvement to the house and is eligible for energy credits that do not apply to the vehicle. It is neither attached to, nor even temporarily installed "in" the vehicle. It is a misnomer to even call it a "charger", when, in fact, it is a power cord supplying power to the charger that is integral to the vehicle. It is neither specific to the vehicle nor required for its operation.

 

[kenrosencpa]

I don't think the wall connection to the charger is considered to be "accessory to the vehicle". In fact, it is (at least when hardwired) considered to be an improvement to the house and is eligible for energy credits that do not apply to the vehicle. It is neither attached to, nor even temporarily installed "in" the vehicle. It is a misnomer to even call it a "charger", when, in fact, it is a power cord supplying power to the charger that is integral to the vehicle. It is neither specific to the vehicle nor required for its operation.

John, if it were me and the $500 charger put you over $80,000, I wouldn't want it on the sticker. the IRS say accessories are part of MSRP, read my post above. It's just foolish to get into that discussion with an auditor. YMHO.

 

[kallisti05]

The new Rivian pricing is killin' me trying to do the Tax credit.
My configuration (Large pack, dual motor, and a mid paint color) puts me at $80,750.

It's really frustrating that a basic R1T with a mid range paint choice puts you $750 over a potential $7,500 tax credit.

 

[John B R1T]

John, if it were me and the $500 charger put you over $80,000, I wouldn't want it on the sticker. the IRS say accessories are part of MSRP, read my post above. It's just foolish to get into that discussion with an auditor. YMHO.

Are you sure it's ON the sticker? Lots of things end up on the Sales Agreement (Buyer's Order) that aren't on the sticker...things like dealer-added paint treatments or wraps after market (dealer added) window tint, pinstriping, VIN etching, Nitrogen in the tires, extended warranties, , document fees, inventory tax, and sales tax, the latter being a big item that would unfairly benefit residents of low-sales-tax states who would pay less if that item were includable.

Financing agreements don't tend to key off of the sticker, but instead look to the Sales Agreement, although some may be balking lately with the "dealer markups" that are being attached to things like the EV6 and Ford and Toyota Pickups (over $10k in some cases around here). The Buyer's Order doesn't even use the sticker price as a starting point in

I bought mine with minimal mileage from a dealer who got it from a flipper. I have the original sticker (printed 6/16/22 but showing original pricing). Nowhere on it does it mention MSRP. When I got it, it had PPF on the gear tunnel doors (which may be a factory thing) and "augmented" window tint on all windows and the roof (none of which was on the sticker). It was not an LE, so it listed the color (El Cap) and the powered tonneau as options at extra cost in arriving at Vehicle Subtotal and Vehicle Price. Full size spare was also an optional extra.

I'm a CPA and I'd MAKE that argument to an auditor. All that being said, my suggestion is to buy the charger from Autel (for less money) and there wouldn't be any problem.

 

[O. horridus]

This has been discussed many times here. MSRP is a well-established term - there is no need for any guessing. MSRP includes base price, options, and accessories installed by the manufacturer. It does not include things installed by the customer or things that don't need installation.

In the case of a Rivian, here are some examples of things included in the MSRP:

• The upcharge for the paint color
• The spare tire (since it has to be installed by Rivian and the weight sticker has to reflect this option)
• The powered tonneau
• Wheel/tire options

These were on my window sticker.

Here are some things that are NOT included in the MSRP:

• Charger
• Cross bars
• All-weather floor mats
• Extra wheels/tires
• T-shirts

These were not on my window sticker. Because the law states that MSRP must be on the sticker, this is a pretty strong confirmation of what I'm saying.

"MSRP" is used in the law is because it is so well-defined and does not permit interpretation or wiggle room. If they said "purchase price" then people could play all sorts of games by subtracting trade-in values and by claiming they got a killer discount, etc. Using MSRP means that everyone who purchased the same vehicle gets treated the same way.

Regardless, all of this is mostly moot now that Rivian has separated out the purchase of most "accessories". Accessories have always been drop-shipped separately from the vehicle, but now they are also purchased separately from the vehicle through the Gear Shop.